The Private Sector in Public Transit: Evaluating Early US Experience in P3s

Abstract

Problems in US public transit are well documented: transit providers struggle to develop new infrastructure, face high project costs and long implementation timelines, pursue designs that prioritize ease of delivery over value to the public, and struggle to sustain their operations. In response to these challenges, Public-Private Partnerships (“P3s” or “PPPs”) have been promoted as a way to deliver more infrastructure on faster timelines at lower cost and higher quality. As P3s have been increasingly considered for major transit projects, this thesis investigates their ability to deliver on promotional claims, and their ability to address key challenges in American public transportation.

First, the thesis contextualizes contemporary P3s within a history of private sector involvement in US public transit. In addition to detailing how existing infrastructure came to be, this history intends to sharpen an understanding of contemporary P3s by considering how forms of private involvement have changed over time. It proceeds to develop detailed case studies for three major infrastructure projects that have proceeded under a P3 model: RTD’s Eagle P3 in Denver, Maryland MTA’s Purple Line in Southern Maryland, and Los Angeles Metro’s Sepulveda Transit Corridor Project. Combining historic research and contemporary case study analysis, the thesis seeks to understand the circumstances under which contemporary P3s have emerged, and to draw lessons from early experience.

American transit providers have considered P3s for a variety of reasons, but have been primarily motivated by limited administrative and financial capacity, and by a perceived ability of private firms to deliver projects on faster timelines. Early P3s have facilitated provision, enabling projects that otherwise may not have been built, and have demonstrated their potential to ensure sustainable operations over long-term contract periods. But P3s have achieved mixed results in accelerating project timelines, and their ability to reduce lifecycle project costs remains unclear. While P3s seek to increase private involvement in transit provision, the model places a higher burden on upfront public planning compared to conventional delivery strategies. Public infrastructure owners can design P3s to leverage private sector resources and capacity, but the model comes with tradeoffs that should be carefully weighed against likely benefits. Ultimately, P3s can address a number of acute challenges in American public transit, but are unlikely to provide a workaround to fundamental political and financial challenges that limit transit development more broadly.